The value of the top 25 percent of properties appears to be rising by more than average valued properties, Quotable Value's latest report shows.
Released on Wednesday, the Quotable Value (QV) House Price Index shows the average New Zealand home is now valued at $1,029,820, an increase of 6.9 percent over the three months to November, or 28.4 percent year-on-year.
But while the November figures look "extremely bullish", QV general manager David Nagel said there's growing signs the current property growth cycle is starting to transition.
"Real estate agents are reporting a significant upswing in listings, while open home attendance rates are falling," Nagel said.
"Some properties are being passed in at auctions, which was unheard of a few months ago."
Further analysis showed higher-priced properties dragged the average property value up. It's an indication that buyers with higher equity (such as existing homeowners), were picking up some of the slack.
"A dozen of the 16 major urban areas we monitor have still recorded an increase in the rate of growth for the QV three-monthly house price index," Nagel said.
"But this is more a result of price pressure at the top end of the market, which generally has a different type of buyer, with less credit restrictions or affordability constraints," he added.
Growth in property values highest in the top 25 percent
Having broken the market into quartiles, QV analysis found the biggest increases were among the top 25 percent of properties (by value).
The average property value in Palmerston North increased by 2.7 percent over the three months to November. But the top 25 percent of properties in the city grew by 6.3 percent.
In Dunedin, values over the last quarter grew by 4.3 percent, the top 25 percent showing 9.6 percent growth over the same time.
"This indicates a change from what we were seeing previously," Nagel added.
Christchurch, Queenstown Lakes, New Plymouth show highest quarterly growth
The average property in Christchurch is now valued at $762,949, marking a 12.7 percent rise for the Garden City over the three months to November.
In the Queenstown Lakes District, property values were up 11.7 percent, followed by the New Plymouth district, up 9.8 percent.
Auckland values up 8.3 percent
The average property value in the super city is $1.48m, up 8.3 percent over the three months to November, up 27.9 percent year-on-year.
In Papakura, the average property value is $1.07m, up 12 percent over the three months to November, up 37.3 percent year-on-year.
The North Shore was the second-hottest area in the region, with 9.4 percent growth in average values over the quarter (25.3 percent year-on-year).
Annual growth across the Auckland region was strongest in Papakura, Franklin, Rodney, Manukau and Waitakere, QV said.
Auckland registered valuer Hugh Robson said the market remained active and low-to-medium priced properties tended to move quickly. Other values noted increasing numbers of homes passed in at auction, anticipating rising interest rates and increasing difficulty getting finance were slowing down the market.
More requests for property appraisals, fewer first-home buyers, falling attendance at open homes and auctions, and waning interest from investors were among the comments reported by local QV property consultants.
Tom Schicker, a QV property consultant for Waikato, said properties priced above $1m were seeing most of the activity in the market.
"Agents are reporting a shift in market sentiment as a result of changing tax regulations and increasing interest rates, with the mid-to-lower end of the Hamilton market becoming less active," Schicker said.
In Rotorua, QV property consultant Derek Turnwald, said local agents reported fewer participants at recent auctions and open homes.
"It does appear that first-home buyers are being marginalised now, due to changes to the LVRs, rising interest rates and increased debt funding criteria of the banks. Investors also seem to be losing interest," Turnwald said.
In the Capital, QV senior consultant Blake Ngarimu, said open home attendance had "dropped off a little" in recent months, but the upper end of the market remained strong.
"The recent lifting of interest rates and tightening of lending has resulted in many buyers struggling to obtain finance," Ngarimu said.
In Palmerston North, QV property consultant Olivia Roberts, also said rising interest rates and debt-to-income ratios appeared to be affecting the bottom end of the market.
"...real estate agents are reporting lower levels of demand in the market with a great deal of uncertainty as a result," Roberts said.
Quotable Value figures are based on a rolling three-month average of sales data and are an indication of changing property values rather than current sales.